Why a Home Loan for Under-Construction Property is a Smart Investment
As environmental awareness grows, people are increasingly seeking ways to make more sustainable choices in every aspect of their lives. One of the most impactful choices we can make is in the way we live and, specifically, in the homes we choose to build or buy. Green housing has become a vital solution for creating more environmentally friendly living spaces and achieving long-term sustainability. In this article, we’ll explore the importance of green housing, what makes a home “green,” and how it benefits individuals and communities.
Lower Property Costs?
Under-construction properties are generally priced lower than ready-to-move-in homes. Builders offer competitive rates to attract buyers before construction is complete, which means you get a property with significant potential for value appreciation at a lower cost. By financing this purchase with a home loan, you can secure an asset at an affordable price while spreading payments over time, which keeps your immediate expenses manageable.
Tax Benefits on Home Loans
Just like any other home loan, a loan for an under-construction property provides tax benefits under the Income Tax Act. Borrowers can claim deductions on both principal and interest components once the construction is complete. The interest paid during the pre-construction period can be claimed in five equal installments starting from the year the property’s construction is finished. This adds up to substantial savings over time, especially for those in higher tax brackets.
Appreciation Potential
One of the key advantages of buying an under-construction property is the potential for significant price appreciation by the time it’s ready for possession. As the property moves closer to completion, market value often increases. By investing early with a home loan, you are essentially locking in the purchase price at a lower rate. This not only grows your equity but also means that you might have a property worth significantly more than what you paid by the time construction is complete.
Flexible Payment Schedules
Many banks and financial institutions offer flexible payment schedules for under-construction properties. This typically includes a staggered payment approach where payments are released to the builder in phases as construction progresses. This can help you manage your finances effectively and offers an advantage over lump-sum payments, which are often required for ready-to-move properties. With a flexible payment structure, you also have time to build savings as you pay in stages.
Higher Resale Value
Buying an under-construction home provides the opportunity to acquire a newly built property with modern facilities and updated design trends, which are attractive to potential buyers. Properties that are recently constructed often fetch higher prices in the market, as they are seen as newer and better maintained. Should you decide to sell the property later, you may benefit from the resale value, making your investment in an under-construction property a wise financial decision.
More Options to Choose From
When purchasing a ready-to-move-in home, options can be limited, as you’re choosing from properties that are already available. However, by opting for an under-construction property, you typically have access to more units and choices in terms of layout, floor plans, and location within the complex. This level of choice allows you to select a unit that best suits your preferences and lifestyle, adding further value to your investment.
